Watch Real Goods and Relative Strength 10-20-16

Yesterday, oil prices rose to a 15-month high, driven by the surprising drop in the U.S. commercial crude inventory, to its lowest level since January. Oil backed off some today, but the provisional OPEC agreement to control output may actually stick. Russia and other non-OPEC oil-producing nations seem cooperative.

While proposed production cuts won’t amount to much, this big shift in attitudes shows producers’ willingness to collaborate on prices. OPEC will meet next in Vienna on November 30. We hope the cartel will act rationally and target stable oil prices.

The U.S. Department of Labor reported today that some 260,000 Americans filed first-time unemployment claims last week, 13,000 more than the week ended Oct. 8, numbers that Labor also revised upward slightly, to 247,000. Read more about Watch Real Goods and Relative Strength 10-20-16

Rate Rise Around the Corner? 10-13-16

Yesterday, the Federal Open Market Committee (FOMC) issued the minutes of its Sept. 20 and 21 meeting; monetary policymakers expect to raise the overnight lending rate “relatively soon.” Several members wanted to act last month; after much disagreement, the majority voted to wait for further labor market improvements by a count of 7-3. Many considered the decision a “close call,” but the minutes left no clues on when the Fed might again lift rates.

The market reacted mildly. Most observers still expect the Fed to maintain current rates until after the November presidential election, which would make the scheduled mid-December FOMC confab the earliest the Fed will likely act. Among factors the Fed considers: unemployment, labor participation, average hourly wages and U-6 unemployment (now 9.7 percent), which includes involuntary part-time workers, the involuntarily unemployed and those only “marginally attached to the labor market." Read more about Rate Rise Around the Corner? 10-13-16

Oil Prices Rise Again, IMF Sounds Warning 10-06-16

U.S. crude oil rose again today, above $50 a barrel, after the U.S. Energy Information Administration announced yesterday that commercial crude oil inventories (outside the strategic petroleum reserve) fell by 3 million barrels in the week ended Sept. 30, to 499.7 million barrels.

Also today, the International Monetary Fund (IMF) warned that while short-term risks to global financial stability have abated since April, medium-term risks have increased. Chiefly, the IMF worries about the massive accumulation of debt, fed by excessively low interest rates and weak worldwide growth. Low rates could also threaten the solvency of many life insurance companies and pension funds, the IMF said, although institutions now have a chance to reshape their balance sheets. Read more about Oil Prices Rise Again, IMF Sounds Warning 10-06-16

OPEC Could Cut Production, Fed to Raise Rates 09-29-2016

OPEC has agreed in Algiers to cut production to a range of 32.5 million-to-33.0 million barrels per day. In effect, this small reduction merely replaces the production ceiling abandoned a year ago. Moreover, how much each country would cut will be decided at the next formal meeting Nov. 30 in Vienna, so this week’s accord is but a preliminary agreement.

The small output reduction isn’t likely to make a significant difference in the global supply, and OPEC members are notorious for ignoring quotas, but the first output reduction in some eight years is a symbolic gesture that perhaps that the disunited cartel can reach an accord. Read more about OPEC Could Cut Production, Fed to Raise Rates 09-29-2016

The Fed Again Holds Rates 09-22-2016

The stock market rose again this morning, after the Federal Open Market Committee (FOMC) announced yesterday that it would hold interest rates at their current 1/4 to 1/2 percent target and hinted it could raise rates but once before the end of this year. Read more about The Fed Again Holds Rates 09-22-2016